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USE YOUR CREDIT CARDS WISELY
Credit Cards  are either  seen as  angel or demon based on the experience people had with them or just reading either  advertisements of credit card issuers or  stories of people being harassed by their credit card recovery agents .  Some people prefer to have as many as  they possess , to show a  status symbol. Some people  abhor the very mention of the same  as if they are going to be ruined by  very touch of them . In fact credit cards are just instruments of  financial  transactions  with few days of  credit attached with them . They  are just like any other instrument , say like knives . You can use them to your advantage  in variety of ways or just kill yourself or the issuers of the cards . Some big card issuers have drowned themselves with  mounting bad credits . Similarly many credit card holders have ruined themselves with huge credit s coupled with unbearable interest and charges . If issuing institutions show some diligence while selecting customers , they can run the business for long with profits . If card holders use them intelligently, they can make them as  friend in need and friend in deed .Â
 My first encounter with credit card in India  was long back  when few  establishments were accepting  the cards .  I had gone  to Calcutta and had transferred my bank accounts  to that branch of the bank .  While in bank , manager there offered me  a credit card with out any charges  . They mailed me the card in a week . I never thought  that I would  use it as no shop where I  usually make purchases was accepting any card . Any how it was a free card  and it went to my wallet . But within few days of receipt , I had  bad news on a Sunday morning  and I had to rush to Bombay . I had  few hundred rupees in my wallet and along  with this credit card . Banks were closed . I was new there and hardly had  acquainted     my neighbors .  I  knew  a flight would cost few thousand rupees .  In that situation , card came to my rescue.  The flight costed me around 15,000/-  as there was no direct flight available and I had  go via  Delhi . It was my first emergency use of credit card .  I think that the emergency use of credit card is one single  factor  which  tilts  the argument in its favour  . Whether you have cash in hand / bank or not  , you can meet your emergency needs in nick  of the time . Any how let us see the  how we can make it as  our angel friend . SELECT YOUR CREDIT CARD1. There are variety of credit cards available .  Select a card which has  no  joining fee or annual fee attached to it  , unless you have a compelling reason to go for  a premium card which carry  those charges . Many of the banks which issue credit cards have such  vanilla cards  . If  you want to go in for  a premium card , weigh  benefits against the charges you have to pay . If  you have to pay , say, Rs  5,000 / per anum for the card  , you must be in  a position to use such card to the extent your reward points / other benefits would save you at least  that amount . Suppose  you are  a regular air traveler  and  premium  card offers extra reward of air miles along with lounge access in the airports  , it would be worthwhile to  have  such cards .  There is no point in holding   a premium travel  card  to  a person who rarely  makes air travel. 2.  Have  a credit card  from your regular banker  who has all your accounts with him . It is easier to get from such  bank as they have  full knowledge of your credit status . It will also make  easier for you to make payments of your dues .  If you are otherwise ineligible to take credit card from them due to reason known to them , you can take a  against your own deposit . It has twin advantage . While  you get  interest free  credit from the card , your deposit would be earning interest  continuously . 3. Have  at least two credit cards  , one for your  regular monthly expenses   and the second one  purely for  your unscheduled expenses , emergency or otherwise .  Be careful  while using the second one . 4.  Compare  various credit cards through portals on the internet  to find which one suits you best . You may apply on line also . Some of such portals  for   U.S  citizens  are  https://www.creditkarma.com/creditcards/ or  http://www.comparecards.com/  In India we have   http://insurance.policybazaar.com/creditcards. You can go directly to the portals of  bankers  and find a suitable card for you USE PRUDENTLY YOUR CREDIT CARD
​1. Golden  principal  is "  USE CREDIT CARDS  TO BUY WHAT YOU NEED   AND  DO NOT  BUY  JUST BECAUSE YOU CAN USE  CREDIT  CARD "  Â
While making  a purchase ,  forget that you have card with you . Remember your card while  making  payment  for the purchase .  In nut shell , avoid  purchase of items which  are otherwise unaffordable for you , even if your card permits you . 2. Use  cards  only in those places , whose bonafides are known  and  who do not charge additionally  for usage of card  . Avoid shady shops  , portals . Some of the  other safety tips 1.    Sign the signature panel on the back of your card as soon as you get 2    Never keep your PIN code in the same place as your card 3    Keep your account number private 4.    Make sure your devices and networks are secure 5.   Shop online only on trusted web sites 6.    Keep your passwords secret 7.   Have  a tab on your account . Check often   Don't pay  for  usage of cards .Some shops/ portals charge up to  2 %  transaction amount  as  fees .  No point in  shelling additional amount   when you can pay in cash .  If a shopper insists and you don't have ready cash ,  you draw from  near by ATM  using your debit card . 3.  Try to  avail maximum days of free credit . Normally credit cards have  20 days to  50  days free credit period . If  you use  the card at the beginning of  billing cycle , you can avail maximum no of free credit days .  4. Never draw  cash  using your credit card . Charges  and interest are heavy . Draw  cash only using your debit card  5. CHECK   OFTEN ON  OFFERS  AND ADDITIONAL REWARDS . You may be benefited . PAY DUES OF CREDIT CARDS DILIGENTLY
1. PAY IN FULL BEFORE DUE DATE Â . Never fall in to trap of paying minimum due .Â
Interest  Rates are high on credit cards . It varies between about 20 %  to 40 % PA  .  Avoid  at  any cost . If  you still don't have cash to pay ,  negotiate with the credit card company  for  a cheaper loan against some collateral or otherwise  .  2. Diarise due date  .  Avoid Late  payment charges . Avoid default . 3. Give standing instruction to your banker to make payment  100 % of dues on due date . If your  bank account and credit card are with  the same banks , it becomes much more simpler.
  MAKE MOST  USE OF CREDIT CARDS PROFITABLYÂ
In nut shell , SELECT  A CARD  WITH NO CHARGES ,  USE THE CARD   PAYING NO CHARGES AND  PAY  FULL ON DUE DATE  WITHOUT ATTRACTING PENALTY .  You will enjoy Free  Credit and  Reward points   at   NO COST . Maximize credit period  by using at the beginning of the billing cycle  .  HAPPY CREDIT CARD USAGE ​
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Manjunathan BellurÂDGM ( Retired )Â |